Financing Maplewood’s Storm Water Management
with a Environmental Utility
The Financing Dilemma
The cost of constructing, operating, and maintaining Maplewood’s storm water facilities continues
to increase along with other municipal costs. In fact, the storm drainage system is often the last
and most expensive public utility for cities to develop.
Traditional methods of financing storm water improvements have become more complex in recent
years. Faced with increasing costs and continuous pressure to minimize property taxes, cities may
lack the financial resources to undertake a multi-year storm water management program.
City general funds and special assessments have typically financed most of the necessary
improvements in the past. However, special assessments are often successfully challenged in
court. Consequently, many communities lack the proper funding to address the increasing costs
related to storm water drainage, water quality management, and wetland protection.
Service charges, which have been used by communities to finance sanitary sewer and water systems,
are now being applied to storm water management. The utility approach is gaining recognition as
the most equitable way to finance storm water management activities while allowing for development.
An environmental utility has been the answer to the financial needs of the equation for many communities.
What is an Environmental Utility?
Let’s start with what the utility is not. The utility is not a new level of
government, nor is the utility a new tax. An environmental utility is
simply a method of financing the administration, planning, implementation,
and maintenance of storm water best management practices (BMPs).
This utility does not replace existing funding sources – it complements
them.
The utility is nothing more than a service charge or fee. The utility fee
is typically charged against all developed parcels within a city based on
the premise of “contributors pay.” Where land is in a natural state, most
rain soaks into the ground or is retained in small depressions. Where
development has been prevalent, rooftops, driveways, and parking lots
prevent rainfall from soaking into the ground. The rain runs off into
streets, ditches, ponds and lakes, creating the need for drainage systems
and to protect the quality of our water resources. Therefore, the fee is
based on how much water runoff and/or pollutant load is contributed
by a particular parcel.
This consistent, dependable revenue source provides a dedicated fund
to manage the drainage system and water quality improvements without
increasing property taxes or using assessments. A utility also provides the
means to handle the increasing costs through small adjustments in the
utility charges.
“The utility fee is typically
charged against all developed
parcels within a city based on the
premise of “contributors pay.”
Rate Structure
The utility approach is based on the concept “contributors pay.” The rate
structure is based on land use type, density, parcel size, and the amount
of runoff and/or pollution load contributed by a particular parcel.
Contributors Pay Concept
How Will the Utility
Benefit the Community?
The utility benefits the community by
providing a dedicated fund for storm
water management activities. Benefits
associated with storm water management include:
Cost per Acre
Commercial
Industrial
Multi-family
Two-family
Single-family
Rate
Storm Water Utility Advantages
• Manage water quality and flood issues
• Water quality improvements
• Drainage system construction
and maintenance
Fair
• Charges are based on runoff rather than property value as is the case
with general taxes.
Dependable
• Erosion and sediment control
• Self financing – does not compete with other governmental agencies
for general revenues.
• Community education
• Provides consistent funding and is easily projected.
• Wetland protection
• Revenues are kept in separate, dedicated funds.
• Improved fish, wildlife, and recreation
opportunities
• Can be used for debt services on revenue bonds.
Simple and Flexible
• Similar to water and sewer charges.
• Adaptable to existing billing systems.
• Credits, exemptions, and appeals are designed into the system.
Acceptable
• No increase in property taxes.
• Regular small service charge is more acceptable than a large one-time
assessment.
• Utilities are in use around the country.
Copyright 2003